Business Developments

Dear Shareholder,

I enclose a copy of your Company’s unaudited results for the third quarter ended 31st December, 2001. You will be happy to know that your Company’s revenues from its core business activity of Information Technology has shown a sharp increase of 484% to Rs.17.59 Crores during the quarter from Rs.3.01 Crores in the corresponding period last year. The net profit from the business has surged to Rs.12.04 Crores from a loss of Rs.1.32 Crores. The total income of the Company for the quarter declined to Rs.20.16 Crores from Rs.22.26 Crores in Q3 last fiscal due to the phasing out of its finance activities but net profit for the total business rose to Rs.13.10 Crores from Rs.12.43 Crores.

During the 9-month period ended December 31, 2001, the share of the IT business in the total income and the net profit has shown substantial growth when compared to the figures for the corresponding period of the last year as indicated below :

(Rs. in Crores) Upto December 31, 2000 Upto December 31, 2001

Total income 59.20 47.96

Of which IT’s contribution 53% 87%

Net profit 38.06 30.38

Contribution from IT business 51% 87%

The IT revenues of the Company have also shown a sequential growth (Q3 over Q2) of 31.21% from Rs.13.40 Crores to Rs.17.59 Crores. This is against the IT industry growth of 2.2% on a quarter-on-quarter basis as reported by Nasscom. (The above figures will confirm the morphing of HTMT into an information technology Company and fast growth of its core business.)

The Q3 results of the Company were taken on record at the meeting of the Board of Directors of HTMT held in Bangalore on 27th January 2002. The Board meeting was held for the first time outside Mumbai, so that the entire Board could visit the Company’s IT facilities and gain a deeper insight into various aspects of the IT business.

Business Developments

A. IT Enabled Services (i) Call Center Services

The Call Center set up by your Company in Bangalore for its US based telecom client started with an initial capacity of 180 seats for handling their in-bound marketing calls. I feel happy to inform you that the Call Center was made operational in a record 64 days as against over four months required to set up such a call center.

HINDUJA TMT LIMITED

Tel : (022) 496 6350, 496 6351. Fax : (022) 493 7374 Website : www.hindujatmt.com

Satisfied with our services, the US customer has decided to offer substantially all of its call center services (both in-bound and out-bound) requirements for future, past and present customers to your Company over a period of time and place an immediate order for business to handle billing related calls, which are more complex and involve higher level of skills. This order, to be initiated with 200 Customer Service Representatives (CSRs), will become operational with immediate effect and the capacity would be scaled up to 600 CSRs by June, 2002.

HTMT is upgrading the Call Center in a phased manner by not only increasing the number of seats but by ratcheting its capabilities to higher notches for handling comprehensive business processing services. (ii) Business Process Outsourcing Services

There is yet another milestone of achievement for HTMT. On our meeting the stringent quality standards in claim processing set by them, our health insurance company (largest in USA) client has agreed for the following :

- To deploy additional 72 agents on the project.

- To treble the number of claims pertaining to a particular category of business directed to us for processing during this year.

This would result in substantial increase in our income from the Claim processing contract in future. The total number of agents/CSRs in your company’s IT enabled services business is expected to increase from 380 at present to over 1200 by June 2002.

B. IT Services

Your Company has appointed Mr. R. Mohan (Ex M.D. - BFL Software) as President - IT Services segment. While HTMT has been able to get into high-end IT enabled businesses, the appointment of Mr. R. Mohan will enable us to expand the scope of our businesses in the sophisticated solutions arena.

We have recently opened a subsidiary in France through HTMT Inc, our US out-fit and are also in the process of tying up with a large electronics group in Germany. This would help your company in marketing its IT services and consolidating its operations in Europe under the supervision of HTMT (Europe) located in UK. Your Company is well poised to leverage the synergies arising from the coalescence of media and telecom assets under its umbrella. Nasscom has identified broadband networking solutions and multi-media content management as emerging business opportunities for Indian IT companies. Going forward, the breadth of our experience and depth of our skills in systems integration and software development for our internet and media subsidiaries will stand us in good stead to exploit the business emerging in the above two areas. We have already received ISO 9001 certification and are in the process of acquiring the SEI CMM level 4 certification to optimize our quality management standards and achieve the best results. We shall focus on giving more value to the customers by leveraging our off-shore advantage. We shall also concentrate on good industry practices to make our business recession-proof and place it in a position to take advantage of an upturn in the competitive landscape.

Subsidiaries

a) In2Cable India Limited (In2Cable)

IN2Cable your Company’s internet subsidiary, has emerged as India’s largest Internet services provider over cable. This subsidiary is in the process of installing a customised authentication and billing software, which would enable it to offer usage based flexible packages, and reduce the bandwidth costs.

b) IndusInd Entertainment Limited (IEL)

IEL’s “InMumbai” Channel - a city specific channel focusing on local events, festivals etc, has successfully organized the popular beauty pageant ‘Miss Mumbai’ for the fourth year in a row. IEL’s ‘In Time’ News Bulletins have been consistently getting higher Television viewership ratings from the monitoring agencies due to their improved format and quality content.

You may be aware that your Company, through its subsidiaries, is in the process of acquiring ForIndia.com, a Company based in U.S.A. Pending the completion of the transaction, IEL had set up an Internet Content Group for providing Content management services like site updates, webcasting of IEL events etc. to ForIndia.com. The Internet Content Group has earned valuable foreign exchange through its content management services. The Internet Content Group has also been engaged in providing web design services and web solutions. c) Cable Video India Limited (CVIL)

“CVO” the cable movie channel of Cable Video India Limited has also been consistently getting higher Television viewership ratings from the monitoring agencies as a result of its high quality film content. The company has recently entered into an arrangement with a company to procure fresh movie rights for telecast on its channel. d) Fascel

Fascel, your Company’s associate and a Hutchison company, continues to maintain its leadership position in the Gujarat cellular market. The recently completed initial public offering of Bharti Televentures Limited has set a healthy benchmark valuation of your Company’s stake in Fascel through its subsidiary ITNL.

Fascel has seen an exponential growth in its cellular subscribers from 117,000 in June 2000 to over 278,000 in January 2002. It is expected that in the near future Hutchison would consolidate all its cellular operations across the country thereby making Fascel a part of the largest cellular footprint in India.

e) IndusInd Media & Communication Ltd (IMC)

IMC continues to be a leading Multi System Operator for distribution of Cable TV services as well as for internet-on-cable services in association with In2Cable India Limited.

IMC has been continuously upgrading its infrastructure for delivering value added services. Since early December 2001, almost the entire CATV network of IMC has been connected to the main state-of-the-art BARCO headend through IMC fibre. Thus almost all the InCableNet subscribers in Mumbai receive uniform high quality television services.

In the city of Bangalore, IMC has networked all its headends through fibre. The fibre network deployed by IMC is of the highest quality as indicated by the level of interest shown by leading Telecom Companies to use IMC’s fibre infrastructure. IMC has already signed an agreement with a leading telecom company for making available a portion of its fibre network. Discussions with other potential users are at an advanced stage. Similar arrangements are being worked for optimum utilization of IMC’s fibre network being deployed in Delhi.

f) Aasia Industrial Technologies Limited (AITL)

Aasia Industrial Technologies Limited, your Company’s subsidiary has been in the business of providing studio equipment and related infrastructural support to various media and other companies.

Indian Entertainment Industry is worth approximately Rs.100 billion at present and is expected to grow at a CAGR of 26% to Rs.315 billion by 2005. In order to exploit this growth potential and enhance its business portfolio, AITL has ventured into film content business by both financing as well as production/acquisition of

movie rights. AITL is one of the very select corporate entities that have requisite domain expertise in the film business and this, coupled with Hinduja Group’s experience in the film industry, is expected to yield lucrative returns. AITL has taken necessary steps to mitigate the risks associated with the business.

This foray would also enable AITL to become a strong content company as apart from the returns it would also acquire various rights like Overseas territory right, Satellite rights, Cable TV rights, Video rights, DD rights, World rights and in-flight rights of the movies produced/financed. AITL’s foray in this field would also enable CVIL to have access to high quality programming required for its movie channel - CVO.

AITL is presently associated with 6 films, which are expected to be completed by December 2002.

Other Developments

a) Profile of New Director

Mr. Dheeraj G. Hinduja, whose profile is attached, joined the Company’s Board as Director during this year. His association with the board has enabled us to provide strategic direction to our core business of Information Technology.

b) Investor Grievance Committee

As a measure of good corporate governance, an Investment Grievance Committee has been constituted by your Board under the Chairmanship of Mr. Anil Harish, Director and it held its first meeting on 27th December, 2001.

The Committee, inter-alia, observed that a few shareholders have not got their shares in the Company dematerialised. Since shares of your Company can be traded only in compulsory demat mode, we suggest that the concerned shareholders take steps to hold their stock in electronic form with any DP.

Unique Moment of Opportunity

According to Nasscom, Business Process Outsourcing or IT enabled services (ITES) sector grew by over 70% from Rs.24 billion in FY2000 to Rs.41 billion in FY2001. Nasscom predicts Indian ITES market at US$ 17 billion by 2008 and according to McKinsey, global remote-service operations may reach a value of US$ 500 billion by that year. Our off-shore development center, Bangalore, is presently well equipped with the technological and human resources to realise the business potential resulting from the cusp of ITES wave and also provide quality on-site and off-shore IT services and customer care.

Your Company, despite the winding down of its financial services business, is confident of achieving much better results in the current year and is committed to realising its vision to become a leader in IT business within a reasonable time-frame and enhance value for its shareholders, customers and staff members.

Yours sincerely,

Mumbai S. Solomon Raj

15th February, 2002 Vice Chairman

HINDUJA TMT LIMITED

(formerly known as Hinduja Finance Corporation Limited)

Hinduja House, Dr. Annie Besant Road, Worli, Mumbai - 400 018

UNAUDITED FINANCIAL RESULTS ( PROVISIONAL) FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER 2001 (Rs. in lakhs, except per share data) Quarter ended December 31, Quarter ended December 31, Nine months ended December 31, Year ended

S.No. Particulars 2001 2000 2001 2000 31.3. 2001

I.T. Other than I.T. Total I.T. Other than I.T. Total Total Total Audited

1 Total Income 1759.19 257.45 2016.64 300.84 1926.03 2226.87 4796.03 5920.30 6172.46

Sales / Income from operations 1734.06 252.10 1986.16 300.84 1926.00 2226.84 4722.89 5894.43 6091.41

Other Income 25.13 5.35 30.48 0.00 0.03 0.03 73.14 25.87 81.05

2 Total Expenditure 495.09 120.7 0 615.79 360.63 227.18 587.8 1 1783.97 1563.47 2049.80

a) Direct Cost 21.55 0.00 21.55 20.95 0.00 20.95 21.55 210.04 216.13

b) Staff Cost 227.94 37.28 265.22 204.89 59.19 264.08 862.34 608.77 677.88

c) Rent and Compensation charges 35.24 39.33 74.57 10.34 41.55 51.89 228.65 166.42 243.37

d) Legal and Professional charges 17.20 6.36 23.56 35.36 79.65 115.01 86.39 172.06 353.06

e) Other 193.16 37.73 230.89 89.09 46.79 135.88 585.04 406.18 559.36

3 Interest and other Finance charges 4.00 5.86 9.86 0.62 130.98 131.60 38.93 239.67 77.90

4 Gross Profit (after interest but before Depreciation,

Tax and Provision for exceptional items) 1260.1 0 130.89 1390.99 (60.4 1) 1567.87 1507.46 2973.13 4117.16 4044.76

5 Less : Provision for N.P.A.s / Bad Debts written off 0.00 0.00 0.00 23.99 76.97 100.96 0.00 100.96 122.76

Depreciation / Amortisation 55.84 4.62 60.46 48.24 45.38 93.62 155.92 112.76 197.08

6 Profit / (Loss) before Tax and exceptional items 1204.26 126.27 1330.53 (132.64) 1445.52 1312.88 2817.21 3903.44 3724.92

Add. Exceptional Items 0.00 0.00 0.00 0.00 180.22 180.22 316.63 258.27 882.12

7 Profit / (Loss) before Tax 1204.26 126.27 1330.53 (132.64) 1625.74 1493.1 0 3133.84 4161.71 4607.04

8 Provision for Taxation 0.00 20.00 20.00 0.00 250.00 250.00 95.00 355.00 400.46

9 Profit / (Loss) after Tax 1204.26 106.27 1310.53 (132.64) 1375.74 1243.1 0 3038.84 3806.71 4206.58

10 Paid up Equity Share Capital (Face Value Rs. 10/-) 3558.37 3558.37 3558.37 3558.37 3558.37

11 Final Dividend 1536.23

12 Reserves Excluding Revaluation Reserve 31207.05

13 Basic and Diluted E.P.S. (not annualised) (Rs.) 3.68 3.49 8.54 10.70 13.67

14 Aggregate of Non-Promoter Shareholding:

- Number of shares 9,530,948 9,536,421

- Percentage of Shareholding (%) 26.78 26.80

Notes : 1 The figures for the Previous Year ended 31st March, 2001 also include financials of Hinduja Telecom India Ltd. (HTIL), Melody Trading Pvt. Ltd. (MTPL) and Richman

Investrade Pvt. Ltd. (RIPL), pursuant to the Bombay High Court Order. The mergers are effective from 31st August, 2000 and hence the previous year figures include financials of these companies from 31st August 2000 to 31st March, 2001.

2 Provision for Taxation has been made for deferred tax and included in Provision for Taxation amounting to Rs.20 lakhs for the quarter ended 31st December, 2001. Deferred Tax Liability upto March 31, 2001 would be adjusted from General Reserves as on 31st March, 2002.

3 Previous year’s figures have been regrouped wherever necessary.

4 The above results were reveiwed by the Audit Committee and taken on record at the meeting of the Board of Directors of the Company held on 27th January, 2002.

S. Solomon Raj Vice Chairman

Notes : There are no Inter Segment Revenues

* This includes capital employed in TMT (Technology, Media and Telecom) Subsidiaries

For Hinduja TMT Limited

Bangalore 27th _{January, 2002}

Segmental Information as per Clause 4 1 of the Listing Agreement for the quarter endend 3 1st December , 2001.

S. No. Particulars Quarter ended Nine months ended

December 3 1, 200 1 December 3 1, 200 1

1 Segment Revenues

a) Convergence Activities

i) I.T. 1759.19 4156.72

ii) Media - Telecom 273.89 1066.10

2033.08 5222.82

b) Treasury (21.79) (499.93)

c) Others 5.35 73.14

Total Income 2016.64 4796.03

2 Segment Results - Profit / Loss Before tax and interest from segment a) Convergence Activities

i) I.T. 1208.26 2679.84

ii) Media - Telecom 152.09 932.19

1360.35 3612.03

b) Treasury (25.31) (512.40)

c) Others 5.35 73.14

1340.39 3172.77

Less : Interest 9.86 38.93

Total Profit before tax 1330.53 3133.84

3 Capital Employed ( Segment Assets - Segment Liabilities ) a) Convergence Activities*

i) I.T. 5935.47 5935.47

ii) Media - Telecom 25605.18 25605.18

31540.65 31540.65

b) Treasury 6263.64 6263.64

c) Others 0.00 0.00

Total 37804.29 37804.29

(Rs. in lakhs) Segmental Information as per Clause 41 of the Listing Agreement for the quarter ended 31st December, 2001.

“PROFILE OF MR. DHEERAJ G. HINDUJA APPOINTED AS DIRECTOR”

Mr. Dheeraj G. Hinduja (DB 4/8/1971), a scion of the promoter family and an MBA from Imperial College, University of London with specialization in Project Management, has joined our Board as Director. He brings with him rich professional experience of having worked with AMAS, U.K. (Market Analyst), Morgan Stanley (Fund Manager) and Ashok Leyland Limited (Project Development). He is already serving as a member of the Steering Committee, which oversees the operations of, and provides strategic direction to, our information technology business and has been a driving force in enhancing our capabilities and growth of that segment. In addition to directing the operations of HTMT Inc and HTMT Europe, our IT marketing subsidiaries abroad, Mr. Hinduja is also on the Boards of Ashok Leyland Limited (a large client of our IT services) and Ashok Leyland Finance Limited. His inclusion in HTMT’s Board has enabled the Company to provide focussed attention to our core activity of IT.